Serendipity is a company that produces shoes and currently applies a cy. In this new year's holiday season, the company is considering changir s policy to a net 45-day credit. The new credit policy is expected to iner ) units per month to 1350 units per month. The current selling price per u per unit are IDR 175.000 and IDR 100.000, respectively. However, if the credit, the selling price per unit and the variable cost per unit will remai ired return is 3% per month.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question
PT. Serendipity is a company that produces shoes and currently applies a cash-only sales
policy. In this new year's holiday season, the company is considering changing its cash-only
sales policy to a net 45-day credit. The new credit policy is expected to increase sales from
1200 units per month to 1350 units per month. The current selling price per unit and variable
cost per unit are IDR 175.000 and IDR 100.000, respectively. However, if the product is sold
on credit, the selling price per unit and the variable cost per unit will remain constant. The
required return is 3% per month.
Based on the above information, calculate the NPV of the new credit policy! Should PT.
Serendipity change its sales policy?
Transcribed Image Text:PT. Serendipity is a company that produces shoes and currently applies a cash-only sales policy. In this new year's holiday season, the company is considering changing its cash-only sales policy to a net 45-day credit. The new credit policy is expected to increase sales from 1200 units per month to 1350 units per month. The current selling price per unit and variable cost per unit are IDR 175.000 and IDR 100.000, respectively. However, if the product is sold on credit, the selling price per unit and the variable cost per unit will remain constant. The required return is 3% per month. Based on the above information, calculate the NPV of the new credit policy! Should PT. Serendipity change its sales policy?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Receivables Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education